DuBeck

In September 2006, respondent California Physicians’ Service, doing business as Blue Shield of California (Blue Shield), canceled appellant Bonnie DuBeck’s medical insurance policy, claiming DuBeck had made material misrepresentations in her application and concealed that she had undergone a fine needle aspiration for a lump in her breast several days before submitting the application. At the time of cancellation, the policy had been in effect 17 months, and Blue Shield had paid medical claims unrelated to the breast cancer, deemed a preexisting condition. The cancellation letter expressly stated that Blue Shield was electing to cancel coverage prospectively, rather than rescind the policy, and that any claims for covered services incurred prior to the cancellation would be covered.

In September 2008, appellant filed the underlying lawsuit, alleging among other things that Blue Shield had failed to pay covered claims while the policy was in force. Blue Shield asserted as an affirmative defense its right to rescind the policy, voiding it ab initia. The trial court granted summary judgment in favor of Blue Shield on this defense. We hold that Blue Shield’s September 2006…